“In two separate court filings on Friday, Apple lodged a motion for a permanent U.S. injunction on Samsung products found in infringement of certain utility patents by a jury earlier in May, while requesting a retrial of the same case,” Mikey Campbell reports AppleInsider.

“As it did in its first California action against Samsung in 2012, Apple is looking to leverage a jury’s recent decision to net a permanent injunction of Samsung devices found in infringement of three patents. The company is also requesting a complete retrial of the damages case that ended in a $119.6 million award, much less than the $2.2 billion Apple was seeking,” Campbell reports. “On the issue of a permanent injunction, Apple is asserting that the continued sales of Samsung’s infringing products would cause the company irreparable harm that cannot be remedied with monetary damages.”

“Apple v Samsung presiding Judge Lucy Koh already denied an injunction in the first California case, saying Apple’s evidence did not sufficiently prove irreparable harm. Considering the current injunction is based on a similar piece of evidence, namely a conjoint consumer survey conducted by MIT professor John Hauser, the granting of an injunction from Koh would be surprising,” Campbell reports. “As for Apple’s bid for a retrial, the company entered a motion for judgment as a matter of law (JMOL) seeking an order that additional Samsung products infringe certain patents, treble damages of the largest damages decision awarded by the jury or, in lieu of the previous, a complete retrial.”

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30 Comments

As indicated by comments form the jury foreman, the jury did not understand the difference between a Standards Essential Patent and a utility patent. The jury treated Apple’s utility patents as SEP patents, and awarded damages based on FRAND (Fair and Reasonable) compensation rates. Apple was not a WILLING licensor of its patents, but the jury assumed that it was when it determined damages. This is grounds for appeal.

I’ve read the jury form and I don’t see this anywhere. Do you have a link to something? I believe it because their questions to Lucy “What Me Worry” Koh showed a complete lack of understanding of the jury deliberation process.

This is the smoking gun that says the jury, led by the nose by the self-admitted “ringer” jury foreman, based Apple’s damages on FRAND patent royalty rates. Apple was NOT a willing seller.

So somebody takes your brand new car from your driveway, for which you just paid $60K and won’t give it back. You sue them and the jury awards you $16K because if you sold it as a used car that’s what you’d get. That’s where the jury’s reasoning takes us.

I hate to tell you this, but if somebody steals your property worth $16,000 then $16,000 is all the compensation you are going to get. It doesn’t matter what you paid for it or what you think it’s worth–you only get the fair market value. Same thing if a negligent driver totals your vehicle; you don’t get replacement value.

Stealing cars is a felony, while infringing patents isn’t, but that is the fault of Congress, not this judge or jury. Even in a car-theft case, the punishment is based on the current market value of the vehicle, not what you paid to buy it or will pay to replace it.

How would you measure damages? Let the jury or the plaintiff just make it up? A verdict like that would be thrown out as arbitrary and capricious. There has to be a rational basis for a verdict to stick.

And you just gave a perfect illustration of what I’m talking about. The car is worth $16K as a used car, but I just paid $60K for it as a new car. I don’t WANT to sell it for $16K used. It’s obviously worth $60K to me new, or I wouldn’t have paid that much for it.

And $16K is not what I’m going to get. That would be a forced sale. I’d be entitled to the actual worth of the car, plus a large portion of the rest of my loss as actual damages. On top of that there would be punitive damages, because the defendant violated the law in the course of monetarily damaging me. You might want to read up on tort law.

As for the damage calculation in this case, a fair way to calculate damages is to subtract from Samsung’s total sales of smart phones using Apple’s patents, what they would have sold without those patents (close to zero). The remainder would be sales directly stolen from Apple. Then, since the damage to Apple was willful, you can tack on punitive damages, or maybe just treble the actual damages.

I get really tired of this attitude that there’s nothing to be done about stuff like this but bend over and take it.

TxUser

Sunday, May 25, 2014 - 9:42 pm ·

Don’t need to read up on tort law. You might. Actual damages are actual damages. Not a technical term–just means the value necessary to put you where you would have been but for the tort. If you paid $60000 for a car that is only worth $16000, you lost $44000 before the bad guy stole the car. He isn’t required to compensate you for a bad bargain or prior depreciation, just for the $16000 car he actually stole… plus incidental damages that don’t usually amount to much.

In this case, Apple is entitled to what they actually lost–the profit from the extra iPhones they would have sold if they had been competing with legal Samsung phones rather than the infringing ones. If they had been interested in licensing the patents, the negotiated price would have just sufficient to replace that profit. So the fair market value of the patents corresponds tolerably well to the actual damages.

Punitive damages, at least in this Federal suit, are not determined by the jury but by the judge based on the jury finding of Samsung’s deliberate infringement. It would have been reversible error for the jury to even consider punishment for Samsung as distinct from compensation for Apple. Complain about the law that limits jury discretion if you will, but the law wasn’t written by the judge or jury.

Swordmaker

Tuesday, May 27, 2014 - 5:33 am ·

Sorry, you fail to understand PATENT LAW. Apple Has a right under the constitution to the sole monopolistic right to determine how their idea is used and exploitation of their invention and who they sell it to. . , AND FOR HOW MUCH. . . for a limited set time. Samsung STOLE that right from them, depriving them of the sole economic exploitation and INCOME from their invention. Apple is under our law usually entitled to the INCOME that Samsung derived from the sales they made because of stealing Apple’s inventions, AND the lost sales APPLE would have enjoyed had Samsung not siphoned those sales away with the products using the infringing invention! This Jury made the an unwarranted assumption that Apple should have licensed the patents to its competitor, Samsung, despite them being trade secrets, and NOT essential for the operation of the standard, and based the award on amounts as if they were a normal patent transaction between a willing licensee and patent holder. It’s not. This makes Apple compete against its own inventions! That is NOT the intent of Patent Law! For the jury to make this ruling turns the patent system on its head! Want to steal a patent? Go ahead. . . A jury will just assign a “fair and reasonable” license rate later despite the unwillingness of your competitor to license his invention! Absurd!

The last I heard, in a free, open, and liberal, market-based economy, the factors of production are entitled to establish the market price at which they will sell their factors. For example, if someone feels the offered labor rate is lower than their labor is worth, the person does not have to accept it. Same goes for capital: if someone does not want to lend money at prevailing market rates, terms, and conditions, the owner of the factor can choose not to do so.

Apple does not wish to sell their intellectual property. They deem the value of their IP to be high (and I am inclined to agree with them). So if Apple feel’s the IP is worth what shall be described as the patent equivalent of “professional wages”, then it would be a gross injustice for someone to basically tell them they have to sell it for, “the Federal minimum wage of $7.25 per hour”.

Personal property is interesting. You do not have to lend it out to anyone who is willing to pay what they feel is a “fair and appropriate market prices”.

Because they didn’t treat them as SEP’s. They treated them as economic property that has an ascertainable value that does not depend on whether the owner wants to sell it or not. The value of an item, for all legal purposes, is what a willing buyer would pay a willing seller in a free market. That does not allow for sellers who would not sell at any price.

This is getting tiresome. No, I would not be happy at only being able to collect my actual economic damages. I would not be happy at only suing for the lost rental value for the property plus the cost of repairing anything that got broken or worn. I would be unhappy, but that’s all I would get unless I could make an argument for punitive damages under my local state laws.

I would be happy that the trespasser might go to jail because he had committed a crime. Again, it isn’t this judge or jury’s fault that Congress hasn’t made patent infringement a crime. Until that happens, you can’t expect intellectual property thieves to be treated like carjackers and trespassers.

Yes, it is getting tiresome trying to explain legal principles to someone who refuses to see the point. Apple’s intellectual property was stolen. Samsung used it to steal sales from Apple with products mimicking Apple’s products at reduced prices. That’s real economic damage. Apple could have kept all those sales for itself and it’s shareholders (of which I am one). How many devices did Samsung sell using Apple’s IP? How many of those sales would Apple have completed without Samsung’s blatant and admitted theft? A conservative estimate is perhaps double the number of devices Apple did manage to sell. Let’s see…80M iPhones x $600 x 40% margin equals about $19B in lost sales. That’s $240 per sale lost to Samsung due to their thievery, not the $1.50 awarded by the jury.

Zeke

Monday, May 26, 2014 - 2:16 pm ·

And if we want to consider the whole time period Apple has been selling iPhones, and not just the time frame addressed in the suit, it’s more like 250M iPhones. Can you say $60B in damages through FQ2, 2014?

Again, you are wrong. Apple is not required to sell their intellectual property at all, to anyone! Apple did not offer it for sale. Samsung STOLE IT. there is no market value for these items because they simply ARE NOT FOR SALE. It is not up to the jury to say that these are for sale at a “fair and reasonable” rate to a thief after determining the thief stole a unique item. Generally, the jury should defer to experts for valuations of unique items that don’t have a market values. Here, apparently, they set aside the testimony of the experts and listened instead to the thief on the valuation of what he stole. Not too good a practice.

Examples: (1) a drunk hits your first car, the one you love so much that you’ve spent twice as much on repairs as the vehicle cost originally. You loved that car and would never have sold it. Sorry, you still only get its current market value from the insurance or the courts.

(2) The government condemns your home to build a freeway. You were born there and hoped to die there. You were utterly unwilling to sell. Sorry, you still only get the fair market value.

The courts only deal with economic losses, not sentimental value or offenses to your dignity. Again, what would you use as the measure of damages if not the value of the property taken?

What insurance companies do is irrelevant. The example of a car was to illustrate the point simply. You’ve latched onto that simple example and proceeded to build an argument on its flaws.

Allowing Samsung to steal a patent that Apple refused to license, and then, in effect, forcing Apple to license that patent to Samsung at a rate that would have been appropriate had Apple been a willing licensor is not how damages should be calculated. Apple’s lost sales due to Samsung’s theft of IP would be a reasonable way to calculate damages.

I’ve painted the next Mona Lisa. I get to name the price of copies. Samsung copies without my consent. Worst case, I get to collect 100% of their profits, not the $2 each that it cost to make the copies. More realistic, I get to collect 100% of the profit I *would have made* selling them myself, as their infringement kept me from making those exact sales. Then, hopefully, treble that.

There would be no art without me having created it, so you don’t get to tell me what you think it is worth. It is mine, and millions are willing to pay $300 each for a copy. The millions you sell for $200 each aren’t only worth $2 in payment to me. Anyone who doesn’t want to pay $300 can do without. Buying your copy for $200 shows that they *do*, in fact, want it. You’re willingness to illegally copy it and sell it to them infringes *my* work, and I should be paid by you the full amount that I would have made selling it myself to the consumer at $300. That’s more money than you made on the copies? Not my problem! It might put you out of business? Not my problem! Maybe next time you’ll think twice before illegally copying other people’s work.

I’m sure to Samsung, those “free” phones they gave away in a BOGO shouldn’t even count at all, as they “didn’t make anything off of them”. But, again, it was a sale they *stole* from Apple, and so the full amount should again be applied. Then trebled. Until that time that they are compensated as the see fit (but I would argue not beyond triple the profit from each lost sale), there should absolutely be a ban on those sales of illegally copied, infringing products.

Tx – You are right, you only get the current market value. And the current market value of an iPhone is $300, not $2.

Only if the judge orders it. With a virtual mountain of evidence in the last trial of Willfulness, including a 128 page internal Samsung document from executives directing the things in the iPhone they wanted copied exactly, stupid Judge Koh decided the infringement wasn’t willful. The Jury has decided one of the infringements in this trial was “willful” but Koh has to agree. . .

They can. . . But it’s doubtful any judge would ever order such an injunction. It’s also doubtful that patent or infringement finding will stand after appeal. It’s too obvious and there are just too many examples of prior art. It’s an example of the jury trying to “split hairs” and be fair. . . idiotic really. They were trying to appear even handed and threw Samsung a bone. . . they should not have.